Cessna Shelves Citation Columbus Program

Business Jet Traveler » June 2009
Monday, June 1, 2009 - 5:00am

When Cessna chairman, CEO and president Jack Pelton said on April 27 that the company's large-cabin Citation Columbus program was being slowed, few could have imagined that two days later the Wichita-based aircraft manufacturer would announce the project's suspension. Pelton said that the "very difficult decision" to stop work on the program will help "ensure focus is on our strong products in existing markets." He added that the Columbus project "still has great potential" and will be pursued "when the market recovers."

Teal Group aerospace analyst Richard Aboulafia speculated that the project's suspension reflects either lack of confidence in the business jet market's recovery or fallout from Textron's finance division, which posted a $66 million loss in the first quarter.

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““CEOs go to their vacation homes just after companies report favorable news, and CEOs return to headquarters right before subsequent news is released. More good news is released when CEOs are back at work, and CEOs appear not to leave headquarters at all if a firm has adverse news to disclose. When CEOs are away from the office, stock prices behave quietly with sharply lower volatility. Volatility increases immediately when CEOs return to work.” —David Yermack, a New York University finance professor, whose recently released study shows a correlation between when CEOs take their private jets on vacation and movements in their companies’ stock price ”

-David Yermack